RBA delivers first interest rate cut in four years

The Reserve Bank of Australia (RBA) has delivered its first interest rate cut since November 2020, reducing the official cash rate by 25 basis points to 4.1%. 

The long-awaited move marks an exciting turning point for the Melbourne property market.

With borrowing conditions improving, confidence is set to rise, driving new momentum and opening up fresh opportunities for buyers, sellers, and investors. As activity builds, all eyes will be on the housing sector to gauge its impact on prices, buyer enthusiasm, and vendor sentiment. Here’s what you need to know about how this rate cut could influence your position in the market.

A market poised for growth

The rate reduction is expected to reignite optimism and encourage buyers who had stepped back due to affordability concerns to return to the market. For vendors, this shift in sentiment is a strong signal of growing demand. A more motivated buyer pool typically leads to more competition, better auction results, and stronger price growth.

“As conditions improve, we are likely to see increased buyer and seller activity, heightened competition, and faster sales - particularly in sought-after suburbs,” said Jellis Craig CEO Andrew McCann.

Investors, too, should find this to be a golden opportunity to expand their portfolios.

“The lower borrowing costs, combined with solid rental growth of 4.1% in 2024, will create some of the most compelling investment conditions we’ve seen in years,” he said.

More cuts on the horizon

Experts are predicting this February cut could be just the first of several rate reductions in 2025. If inflation continues to stabilise and decline, the RBA could lower the cash rate again, bringing even greater relief to borrowers and further boosting market conditions. However, much will depend on economic indicators, including employment trends, consumer spending, and global financial conditions. 

“If the RBA continues to ease interest rates throughout the year, the Melbourne property market is well-positioned for strong growth in the second half of 2025,” said Mr McCann.

“Understanding these shifts and acting strategically will be key to making the most of this evolving market.”

Stay ahead of the curve

Whether you’re considering buying, selling, or investing, staying informed will help you maximise the current opportunities. For expert guidance and tailored insights on how these changes are affecting your local area, contact your Jellis Craig team today.

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